Tag Archives: housing

Markets Leveling Out

Recent reports and key housing market indicators are already showing the fulfillment of previous predictions. Across the nation, markets are becoming more about demand and less about supply.

California, the other traditionally in-demand markets of Las Vegas, Reno, and Phoenix, and recovery contender Detroit, are surging ahead with the highest increases in list prices and sales. As Realtor.com states, “This underscores the uneven nature of the housing recovery and its dependence on the strength of the local economy.” Housing market normalization is inseparably tied to economic recovery, and generates a feedback loop of each strengthening the other. Most markets across the nation fall into the middle category between the top movers and struggling low markets. The big picture is one of gradual stabilization in the economy and the housing market.

The start of the school year signals the end of the peak home buying season, and analysis of the summer’s reports show the roller coaster ride we’ve been on is also at an end. As Realtor.com reports, three of the “key [housing market] indicators – inventory count, median age and median list price [are] signaling a leveling of the market.”
Inventories are stabilizing. Shifting from the dramatic overage to the drastic shortage, the new mix of existing and new homes for sale are giving buyer’s more and better options, helping to generate moderate (i.e. sustainable) across-the -board price increases. The median age of inventory for July is 85 days, meaning the average time a home sits from listing to sale is less than three months, which is still pretty fast: only about 6% longer than the previous month while almost 17% lower than last year’s slow surplus. The median list price (nationwide) is just under $200,000, up 5.27% from last year. The average price increase is caused by small gains in hotter markets coupled with several more “negative” markets, markets that have been showing average price declines from the previous year, climbing back into the black.

The overall effect of this normalization is balance; something many real estate professionals have rarely seen. No big winners, no big losers, just the balanced interplay of buyers and sellers in a market that reflects fair value. New home construction is back on track in much of the country, providing a welcome economic boost in construction and materials jobs while providing the inventory options to meet buyer demands while still contributing to the stabilization of home values.

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About Tom DavidsonTom Davidson is Vice President of Express Schools, LLC. which operates online education providers Real Estate Express, Insurance License Express and License Tutor. Follow him on Twitter.

The Return of 2013 Housing Market!

Remember all those times we wondered, “Will the housing market recover?” “When will we see signs of recovery?” “Are we there yet?” The answers are: Yes! Now! Oh, Yeah!

It’s not a surprise, either. All of 2013 has shown steady increases in home sales, with existing home sales leading the way. New home construction is trickling back from the deep construction low that followed the housing market’s collapse, but the numbers are nowhere near keeping up with the current surge in demand.

Additionally, “distressed homes – foreclosures and short sales – accounted for 18 percent of May sales” reports Realtor.com, the ratio, holding steady from April, is the lowest percentage posted since 2008. As those typiclly discounted homes clear the market and “shadow inventories” dwindle away, fewer distressed home sales can account for some of the increased average (while previously the high numbers of distressed homes could be blamed for low average home salve prices). With distressed home inventory’s influence over the average home sale price decreasing, average home values are surging off the artificial decrease as well as increasing off the limited overall supply. Simply put, part of the price increase is due to fewer discounted foreclosures dragging down the average, and partly because there just aren’t enough homes for sale.

In-demand markets like Las Vegas, San Francisco, and Phoenix, and the prime neighborhoods in many other areas are showing the most rapid price jumps due to buyer competition, but home sale prices are increasing all over. The national association of Realtors reports the median sale price of existing homes rose 15% in May 2013 from May of 2012.

The housing market is hot and fierce right now with buyers in some areas going to great lengths to beat out the competition, and sellers are feeling the relief as home values increase. These conditions could continue for the remainder of 2013, but the rapidly recovering housing market is on the verge of shifting to something ultimately far better overall: a normal healthy housing market! Instead of the drastic highs and lows that have made buyers and sellers into losers and winners over the past few years, a lot of really good-for-the-economy stuff is already in the works.

Home starts are ramping up, bringing builders back with construction jobs and homes for the inventory-starved buyers. Mortgage rates are increasing (yes, this is a good thing), winding down the massive stimulus programs of the Federal Reserve. While still below historic averages, higher lending rates increase the value of the dollar and are a good sign that the economy in general, if not the individual homebuyer.

Recovery is now, but normal is still on the horizon, so take advantage of the momentum this year, and look forward to a happily steady and less dramatic, healthy housing market in the near future.

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About Geoff ThompsonGeoff Thompson is an Owner and Founding Partner of Express Schools, LLC. which operates online education providers Real Estate Express, Insurance License Express and License Tutor. Follow him on Twitter.

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After years of a constant up and down pricing battle, the U.S. housing market is finally returning to its’ normal state. Fiserv Case – Shriller is predicting home prices will increase by an average of 3.3% annually over the next five years. With the housing market resembling normalcy for the first time since 1997, there is not a better time than now to get into the real estate industry.

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About Tom DavidsonTom Davidson is Vice President of Express Schools, LLC. which operates online education providers Real Estate Express, Insurance License Express and License Tutor. Follow him on Twitter.

Winter Doldrums an Improvement? A Return to Normalcy in the Housing Market

Blame it on your favorite weather scapegoat: Atmospheric cycles, Climate change, Punxsutawney Phil: winter is not nearly finished with us. This year’s frigid temperatures are perhaps a rebound reaction to make up this year what we lacked in cold and catastrophe last year. Whatever the reason, the cold wet weather is taking its typical toll on the housing market.

January’s home sales dropped a hair (0.4%) from December. This is after December’s sales dropped 1% from November, which had in turn dropped from September. It’s to be expected that the downward trend in home sales might continue to drop until warmer weather hits. There’s a reason statisticians like to hedge numbers in “seasonally adjusted” terms.

According to the National Association of Realtors “The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.”

Winter is a traditional low-time for housing sales. Between the traditional school season and year-end holidays, freezing temperatures and dangerous icy conditions, no one wants the hassle of a winter move. So unless it’s unavoidable, people tend to do their home buying and selling in milder months.
Last year the mild winter and early spring gave housing sales a much-needed boost during a stumbling recovery, pushing higher sales activity than typical for the winter season due to “abnormal weather patterns.”

This winter is not an exception to the traditional winter lull, but the statistics on the housing market are surprisingly good. While last winter showed slow and desperately needed steps toward recovery from the housing market crash, the depths of this long winter are showing something even more encouraging: we’re seeing activity in much more tune with the typical seasonal cycle of a healthy housing market. So while the market may be down from the fall, it is up (a lot!) from last year.

The National Association of Realtors’ January reports state existing home sales 9.1% above January 2012. Existing home inventory is listed at 4.2 months supply, which is the lowest housing supply we’ve seen since April of 2005! Meanwhile, interest rates on the 30-year fixed rate mortgage remain low, at 3.41%, up slightly from the record low of 3.35% seen at the end of 2012, but still a significant amount lower than the 3.92% on January 2012 (which was at that time also a record low). This limited inventory, combined with the continued low interest rates is responsible for the 12.3% rise in the national median sale price of all housing types over January of 2012. This rise marks the 11th month of year-over-year price increases, and the highest increase since November 2005 gained 12.9% over the previous year.

Granted that compared to last year, it wouldn’t take much to post an improvement, but the strong numbers in the midst of this fridge winter season are leading many experts to herald a market shift from buyer’s to seller’s, and anticipate further strengthening of home values in the spring, when traffic seasonally increases.


Location, Location, Location

As gas prices begin yet another round of increases with no end in sight (if ever) homebuyers are finding that picking the right location is more valuable than ever.

America was built on the automobile. The sheer size of the nation, coupled with the majesty of its natural landforms, not to mention the American ideals of independence and self-reliance, served to focus national transportation away from large-scale mass transit, and onto personal transportation modes. Simply put: we are a nation of drivers, and our infrastructure reflects that. With the exception of some major metropolitan cities, most of America is spread out: we live in one place, work in another, shop in another, and play in yet another, and all of them located too distant from each other for easy access except by car.

Unfortunately, current economic and market conditions, decreased supplies, increased demands, and strong international competition are all driving gas prices sky-high. Prices are at a four-month high, despite the winter’s typical decrease in travel. According to the EIA, the Energy Information Administration, the nationwide average price per gallon for regular unleaded gasoline is $3.75. That’s a whopping 21 cent hike from the beginning of February alone. Speculators are predicting some price decreases in the spring, then increased imports and additional production kick in. Though the current jump is blamed on the low-season closing of US refineries for maintenance, Americans have seen steady increases in gas prices through the past decade, and though prices fluctuate, significant long-term cost declines are not expected.

As gas prices rise, the cost of all of this travel is taking its toll, and Americans are beginning to reevaluate their lifestyle choices. Not only are they seeking out homes closer to their primary places of employment, homebuyers are now actively searching for housing options that cut down on their travel expenses.

One of the housing options gaining renewed popularity is the “walking community” – neighborhoods located within walking distance to core necessities such as grocery stores, shops, schools, and more. Some walking communities are planned by building neighborhoods close to these amenities, others have developed when zoning and construction brought the shops and schools to the neighborhoods, while others have even been custom-built from the ground up as all-inclusive communities. This trend has also helped spur urban renewal in many areas, bringing new life to downtowns. Other community movements from bike paths to carpool-lanes are also gaining in popularity. New and existing mass transit systems from major suburban hubs and areas of dense housing to downtowns and other large employment centers are also gaining increased support, and homes within easy access to transit are gaining a boost in interest and sale value.

Homebuyers feeling the pinch of the pump should carefully evaluate home locations that best suit their needs. Families may need to compromise to find the best location to balance multiple places of employment, schools, and other regular destinations, with the homes and neighborhoods that best suit their needs and desires. Mapping travel distances and frequencies can also help homebuyers focus their search, while factoring in access to mass transit and other transportation options into their envisioned lifestyles.

As gas prices continue to shed light on the value of transportation and convenience, the old axiom “location, location, location” is gaining new focus and emphasis in today’s housing market.

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About David GoldsteinDavid Goldstein is an Owner and Founding Partner of Express Schools, LLC. which operates online education providers Real Estate Express, Insurance License Express and License Tutor. Follow him on Twitter.